UPSC Prelims 2026 Question Paper
Explore the complete solved question paper for UPSC Prelims 2026 featuring 100 solved questions with bilingual (English & Hindi) explanations, official answer key, and subject weightage breakdown.
Which one of the following is the first Plan Vivo certified Reducing Emissions from Deforestation and Forest Degradation (REDD+) project in India ?
Detailed Explanation:
This project in Meghalaya is India's first REDD+ project certified under Plan Vivo Standard (a fair-trade-style framework for community forest carbon projects).
Key Facts:
- Location: East Khasi Hills, Meghalaya, near Umiam River
- Managed by: A federation of 10 Khasi tribal kingdoms (called "Synjuk"), covering 60+ communities
- What it does: Protects sacred forest groves (REDD+) and restores degraded forests (Assisted Natural Regeneration)
Why other options are wrong:
- Uttarakhand — only did readiness/pilot work, not the first certified project
- ICFRE-ICIMOD — a broader regional capacity-building program, not a single certified community project
- Sikkim — good conservation work, but not the first
Consider the following statements about Rhynchostylis retusa (Foxtail orchid) :
- It is an epiphytic orchid.
- The species is endemic to North-east India.
- It is the State flower of Arunachal Pradesh and Assam.
Which of the statements given above is/are correct ?
Detailed Explanation:
Statement 1 — Correct. It's an epiphytic orchid — it grows on tree trunks/branches, using the tree only for support and taking moisture from air. It's not a parasite, doesn't harm the tree.
Statement 2 — Incorrect. Not endemic to North-east India. It's found across Tropical Asia — China, Nepal, Sri Lanka, Bhutan, Myanmar, Thailand, Malaysia, Indonesia, Philippines. Even within India, it grows in Odisha, Andhra Pradesh, Andaman & Nicobar too — not just North-east.
Statement 3 — Correct. It is the State flower of both Assam and Arunachal Pradesh. In Assam, it's called Kopou Phool — culturally important, worn during Bihu dance and weddings.
Memory Trick: "Epiphyte + Endemic" sound similar but mean different things — epiphyte = grows on trees; endemic = found only in one place. Don't confuse the two!
Which of the following statements with regard to the arrival of Amur Falcons at Doyang Lake in Nagaland each year from Mongolia is/are correct?
- It showcases how sustained local conservation efforts can contribute to the arrival and protection of international migratory birds.
- It reflects the global success of advanced tracking technologies that guide migratory birds back to their stopover sites.
- It confirms that Amur Falcons have adapted to permanent residency in India due to favourable habitat changes.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Correct. Doyang Lake is a conservation success story. Earlier, falcons were hunted in huge numbers. After efforts by NGOs, the Forest Department, and local communities, hunting stopped completely. Nagaland is now called "Falcon Capital of the World."
Statement 2 — Incorrect. Tracking devices (solar-powered transmitters) only collect data for scientists — they don't guide the birds. Falcons find their way using their own natural instincts, not technology.
Statement 3 — Incorrect. Falcons are not permanent residents of India — they're long-distance migrants. They breed in Siberia/Northern China, then fly to Southern Africa for winter — about 22,000 km journey. Doyang Lake is just a temporary stopover (Oct-Nov) to gain fat reserves before crossing the Arabian Sea.
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Which of the following statements in relation to NIRANTAR (National Institute for Research and Application of Natural Resources to Transform, Adapt and Build Resilience), a platform of institutions under the Ministry of Environment, Forest and Climate Change, is/are correct ?
- Ecosystem Survey and Analysis is a vertical under this platform, the lead institute of which is Botanical Survey of India, Kolkata.
- Research and Management of Ecosystem Service is a vertical under this platform, the lead institute of which is Central Zoo Authority, New Delhi.
- Capacity Development Support is a vertical under this platform, the lead institute of which is Indian Institute of Forest Management, Bhopal.
Select the answer using the code given below :
Detailed Explanation:
NIRANTAR is a platform under the Ministry of Environment, Forest and Climate Change with 4 thematic verticals — each led by a specific institute.
Statement 1 — Correct. Ecosystem Survey & Analysis vertical → led by Botanical Survey of India (BSI), Kolkata.
Statement 2 — Incorrect. Research and Management of Ecosystem Service vertical → led by ICFRE, Dehradun — NOT Central Zoo Authority. CZA is just a participating institute, not the lead.
Statement 3 — Correct. Capacity Development Support vertical → led by Indian Institute of Forest Management (IIFM), Bhopal.
Memory Trick:
| Vertical | Lead Institute |
|---|---|
| Ecosystem Survey & Analysis | BSI, Kolkata |
| Research & Mgmt of Ecosystem Service | ICFRE, Dehradun |
| Capacity Development Support | IIFM, Bhopal |
Which of the following best explain(s) the rationale for protecting mangrove ecosystems in the context of climate resilience?
- Mangroves reduce tidal energy and store freshwater, making them ideal sites for paddy cultivation in saline estuarine belts.
- Their salt-sensitive roots filter seawater, making mangroves key to converting coastal land into freshwater aquaculture zones.
- By withstanding tidal surges and offering biomass resources, mangroves function both as natural bio-shields and livelihood bases for rural communities.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Incorrect. Mangroves do NOT store freshwater and are NOT suited for paddy cultivation. In fact, clearing mangroves to make paddy fields is one of the main reasons mangroves are being destroyed — exactly the opposite of conservation.
Statement 2 — Incorrect. Mangroves are halophytes — meaning their roots are salt-tolerant, not salt-sensitive. They don't convert land into freshwater zones. In fact, clearing mangroves for shrimp farming/aquaculture is a major threat to them.
Statement 3 — Correct. Mangroves act as natural bio-shields:
- Their roots (stilt roots, pneumatophores) reduce tidal energy and protect coasts from storms/cyclones
- They provide livelihood resources — timber, honey, fish breeding — for coastal communities
Memory Trick: Mangroves PROTECT coasts and PROVIDE livelihoods — they are NOT meant to be cleared for farming or freshwater use. Anything suggesting "convert" or "clear mangroves for X" is automatically wrong.
With respect to the Western Hoolock Gibbons, which of the following statements is/are correct?
- A Sanctuary in North-east India is home to this ape species listed as Endangered in the International Union for Conservation of Nature (IUCN) Red List.
- They have specialized brachiation and can easily swing between trees.
- They possess a strong and heavy build like gorillas, yet are remarkably agile tree climbers.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Correct. Hollongapar Gibbon Sanctuary in Assam is dedicated to this species. The Western Hoolock Gibbon is listed as Endangered on the IUCN Red List.
Statement 2 — Correct. They move through brachiation — using their long arms to swing quickly from branch to branch. This is their main way of moving through forests.
Statement 3 — Incorrect. Gibbons are "lesser apes" (small apes), NOT like gorillas (great apes). They are small, slender, and lightweight — only 6 to 9 kg. Their light body is exactly WHY they can swing so agilely — a heavy gorilla-like build would make this impossible.
Memory Trick: Gibbons = Light + Long arms = Great swingers. Gorillas = Heavy + Strong = Ground-based. Don't mix them up!
Consider the following statements with reference to India's response to climate change :
I. India's Long-Term Low Emission Development Strategy (LT-LEDS) is a crucial tool for achieving net-zero emissions by 2070.
II. India's 4th Biennial Update Report (BUR-4) submitted in December, 2024 recorded around 8% decrease in Greenhouse gas emissions in 2020 over 2019.
III. Climate-resilient development necessarily depends on quick and short-term achievement of emission reduction targets.
Which of the following relationships among the above statements is/are correct ?
- Statement I is empirically supported by statement II.
- Statement III contradicts the approach implicit in statement I.
- Statement I and statement III together establish the premise of long-term sustainability.
Select the answer using the code given below :
Detailed Explanation:
This is a tricky "relationship-type" question. Let's understand each base statement first, then check the relationships.
Base Statement I — Correct on its own. LT-LEDS is India's roadmap to reach net-zero by 2070.
Base Statement II — Misleading. Yes, emissions dropped 8% in 2020 vs 2019 — but this was due to COVID-19 lockdowns, not real climate policy success. So it's a temporary effect, not proof that LT-LEDS strategy is working.
Base Statement III — Correct on its own. Real climate resilience needs fast, urgent action now — not just long-term planning.
Now checking the Relationships:
- Relationship 1 — Correct. "Statement I is empirically supported by Statement II" — wait, this says I IS supported by II. But actually the BUR-4 drop was due to COVID, NOT due to LT-LEDS strategy working. So this relationship statement is describing a FALSE claim — and the question asks which relationship statements are correct descriptions of the logical relationship, here pointing out that II does NOT really support I, hence...
Actually — let's simplify: The model answer says relationships 1 and 2 are correct. Relationship 1 says I is supported by II — and the explanation says this is not true (COVID caused the drop, not strategy). So actually relationship statement 1 must be interpreted as a false pairing that the question wants us to identify as the "stated relationship," which the explanation contradicts.
Given the official explanation, the test-makers consider:
- Relationship 2 — Correct: Statement III (need urgent short-term action) contradicts the long-term-only approach of Statement I (LT-LEDS, focused on 2070).
Memory Trick: Long-term plans (2070 target) vs urgent short-term action — these two philosophies are in tension with each other. COVID-linked emission drops are not genuine policy success.
Which of the following statements with regard to Green Hydrogen is/are correct ?
- It is decarbonized hydrogen obtained from natural gas reforming combined with carbon capture and storage (CCS).
- It is produced using electrolysis of water with electricity generated by renewable energy.
- National Green Hydrogen Mission of India aims for abatement of nearly 50 MMT of annual greenhouse gas emissions by 2030.
Select the answer using the code given below :
Detailed Explanation:
Statement 1 — Incorrect. This describes Blue Hydrogen, NOT Green Hydrogen. Blue Hydrogen comes from natural gas + carbon capture (CCS). Green Hydrogen uses a completely different method (see Statement 2).
Statement 2 — Correct. Green Hydrogen = splitting water (electrolysis) using electricity from renewable sources (solar/wind). It's a zero-emission process.
Statement 3 — Correct. India's National Green Hydrogen Mission targets:
- 5 MMT/year production capacity by 2030
- This leads to ~50 MMT reduction in greenhouse gas emissions annually
- Plus reduces fossil fuel imports and creates 6 lakh+ jobs
Memory Trick: Color-code hydrogen by source:
- Green = Renewable electricity + water (clean)
- Blue = Natural gas + carbon capture (cleaner fossil)
- Grey = Natural gas, no carbon capture (dirty)
Consider the following statements with reference to the Sagarmala Programme of the Government of India :
I. The Sagarmala Programme seeks to achieve port-led economic growth through cost-effective and sustainable coastal infrastructure. II. The success of the Sagarmala Programme is reflected in significant growth in coastal and inland waterway shipping, along with improved global port rankings. III. Sagarmala 2.0 aims to position India as a global maritime innovation hub aligned with Atmanirbhar Bharat and Viksit Bharat 2047 visions.
Which of the following relationships among the above statements is/are correct ?
- Statement II validates the effectiveness of the strategies envisioned in statement I.
- Statement III extends the objectives of statement I by embedding them into a future-oriented innovation framework.
- Statement I contradicts statement III by focusing only on traditional infrastructure instead of modern innovation.
Select the answer using the code given below :
Detailed Explanation:
Answer: Option 2 (Relationships 1 and 2 are correct)
Simple Explanation:
This question checks if you understand how the original Sagarmala connects to Sagarmala 2.0.
Base Facts:
- Statement I: Sagarmala = port-led growth through coastal infrastructure (launched 2015)
- Statement II: Real success shown — 118% growth in coastal shipping, 700% rise in inland waterway cargo, 9 Indian ports in global top 100
- Statement III: Sagarmala 2.0 = next phase, focused on smart ports, green shipping, and innovation (linked to Atmanirbhar Bharat & Viksit Bharat 2047)
Relationship 1 — Correct. Statement II gives real proof/numbers that Statement I's strategy actually worked. So II validates I.
Relationship 2 — Correct. Statement III is simply the next stage of Statement I — adding innovation and technology on top of the same port-led growth idea. It extends, doesn't replace.
Relationship 3 — Incorrect. Statement I does NOT contradict Statement III. The basic infrastructure (Statement I) is the foundation on which modern innovation (Statement III) is built. They work together, not against each other.
Memory Trick: Sagarmala 1.0 = Build the base. Sagarmala 2.0 = Build the future on that base. No conflict, only progression.
In what way(s) does the Vizhinjam International Seaport represent a structural shift in India's maritime trade and logistics policy?
- By functioning exclusively as a domestic cargo hub to reduce reliance on coastal shipping and eliminate the need for foreign collaborations.
- By focusing primarily on passenger cruise tourism and heritage shipping to increase Kerala's profile as a maritime heritage destination.
- By leveraging its natural deep draft and strategic location to reduce dependence on foreign trans-shipment ports, enhance revenue retention, and reposition India in regional maritime trade.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Incorrect. Vizhinjam is an international transshipment hub, NOT a domestic-only cargo port. It actually needs coastal shipping (smaller ships distribute cargo from big ships) and actively invites foreign collaboration — not eliminates it.
Statement 2 — Incorrect. While there's a cruise terminal, the port's main focus is container transshipment, not tourism or heritage shipping.
Statement 3 — Correct. Vizhinjam's strength comes from:
- Natural deep draft (18-24m) — can handle the biggest ships (ULCS) that earlier couldn't dock in India
- Location — just 10 nautical miles from the busy East-West shipping route
- Goal: Take back cargo business that currently goes to Colombo, Singapore, Jebel Ali
- Benefit: Saves India $200-400 million/year in transshipment revenue, repositions India in global trade
Which of the following is/are the most significant implication(s) of obtaining Oeko-Tex certification for Eri Silk in the global textile industry?
- It allows Indian exporters to compete in high-end markets that prioritise chemical-free products.
- It confirms that Eri Silk meets international safety, environmental, and quality standards, enabling its entry into premium eco-conscious markets.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Correct. Oeko-Tex certification proves the silk is free from harmful chemicals. This helps Indian exporters compete in high-end global markets that demand safe, chemical-free products.
Statement 2 — Correct. This certification confirms Eri Silk meets international safety, environmental, and quality standards. Combined with its GI tag and reputation as cruelty-free "peace silk" (no silkworm killed in production), it opens doors to premium eco-conscious markets like Europe and North America.
Both statements are simply two sides of the same benefit — certification = trust = market access.
Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct?
Detailed Explanation:
Option A — Correct (true statement). UPI moves money already in bank accounts. Digital Rupee is like digital cash — issued directly by RBI, same as physical currency.
Option B — Correct (true statement). UPI: money debited/credited instantly through banks. Digital Rupee: wallet-to-wallet transfer is final immediately, like handing over cash — no separate settlement needed.
Option C — Correct (true statement). UPI transactions go through bank accounts, so they show up in bank statements. Digital Rupee transfers are wallet-to-wallet, so individual transactions don't show in bank statements (only loading/unloading the wallet does).
Option D — INCORRECT (this is the answer we need).
- UPI money = commercial bank's liability (since it's bank money)
- Digital Rupee = RBI's liability (since RBI issues it directly, like physical cash)
These are different, NOT the same — so saying "in both cases, liability is with banks" is wrong.
Which one of the following best describes the key objective of India's 'Open Network for Digital Commerce' (ONDC) initiative?
Detailed Explanation:
Option A — Wrong. ONDC is not government-controlled transactions — it promotes an open, decentralized marketplace.
Option B — Wrong. ONDC doesn't replace companies like Amazon/Flipkart. Instead, private apps join the ONDC network and operate within it.
Option C — Correct. ONDC's main goal: break the monopoly of a few big e-commerce giants by making the market open and interoperable — so small businesses, local shops, and MSMEs can directly reach customers without depending on one big platform.
Option D — Wrong. ONDC is called "UPI of e-commerce" because it follows the same open philosophy, but it does NOT force UPI as the only payment method.
Memory Trick: Just like UPI broke the monopoly of single payment apps and made all UPI apps talk to each other, ONDC does the same for shopping apps — breaking big platform dominance.
Which one of the following best describes the 'Crowding Out Effect' in the context of fiscal policy ?
Detailed Explanation:
Answer: Option 2 — Government borrowing raises interest rates, reducing private investment
Simple Explanation:
Option A — Wrong. This describes the opposite concept — "Crowding In Effect." It happens during a recession when govt spending boosts confidence and increases private investment too.
Option B — Correct. Crowding Out works like this:
- Govt runs a deficit → borrows heavily from the market
- More borrowers compete for the same pool of money (loanable funds)
- This pushes interest rates up
- Higher interest rates make loans expensive for private businesses
- So private investment goes down — it gets "crowded out"
Option C — Wrong. Higher taxes mean less money in people's pockets → less spending/investment, not more.
Option D — Wrong. Govt spending does add to demand. Crowding out just means the net effect is smaller than expected (because private investment drops), not zero.
Memory Trick: Govt borrows too much → interest rates rise → private players get "pushed out" (crowded out) of the loan market, like a small car getting squeezed out by a big truck in traffic.
Which of the following statements about insurance in aviation sector is/are correct ?
- 'Aviation Hull Insurance' covers the physical aircraft, including the body, engine, and on-board equipment.
- Under the Montreal Convention, adopted in 1999 by over 130 countries, including India, airlines are strictly liable to pay compensation to the family/nominee of every deceased passenger without requiring the family to prove fault.
Select the answer using the code given below :
Detailed Explanation:
Statement 1 — Correct. Aviation Hull Insurance covers the physical aircraft itself — body (fuselage), wings, engines, and on-board equipment. Think of it as insurance for the machine, not the people. (Different from Liability Insurance, which covers passenger injury/third-party damage claims.)
Statement 2 — Correct. The Montreal Convention (1999) — signed by 130+ countries including India — says:
- For death/injury claims up to a certain limit, the airline is automatically liable
- The family does NOT need to prove the airline was at fault
- This is called "strict liability" — compensation is guaranteed up to that limit, no blame-game needed
Memory Trick:
- Hull Insurance = Insurance for the aircraft body (the machine)
- Montreal Convention = Automatic compensation for passengers (no need to prove fault) up to a limit
Which of the following statements about Real-World Assets (RWA) Tokenization are correct?
- Tokenization is the process of turning real world assets into digital tokens using blockchain technology.
- Tokenization of real world assets offers 24x7 access, promoting financial inclusion.
- Tokenization of real world assets will allow the access to high growth investment opportunities for individuals in India.
Select the answer using the code given below:
Detailed Explanation:
Statement 1 — Correct. Tokenization = converting ownership of real assets (real estate, gold, bonds) into digital tokens on blockchain. Each token = a small share of that asset.
Statement 2 — Correct. Unlike traditional markets (fixed hours, location limits), tokenized assets can be traded 24x7, globally, instantly. Also, expensive assets get divided into small affordable pieces — letting ordinary people invest too. This is financial inclusion.
Statement 3 — Correct. In India, this opens up high-growth sectors (real estate, infrastructure, farmland) to common investors. Bodies like IFSCA (GIFT City) are already approving such platforms.
All three statements simply describe different benefits of the same concept — no contradictions.
Memory Trick: Tokenization = "Slicing a big cake (asset) into small pieces (tokens)" so everyone can have a bite, anytime, anywhere.
Consider the following statements about Multidimensional Poverty Index (MPI) :
- MPI is calculated using Alkire-Foster methodology.
- MPI calculated by NITI Aayog has a total of twelve indicators.
- Maternal Health and Bank Account are common indicators in the MPI of NITI Aayog and MPI of United Nations Development Programme (UNDP).
Which of the statements given above is/are correct ?
Detailed Explanation:
Statement 1 — Correct. Both India's National MPI and the Global MPI (UNDP) use the same calculation method called Alkire-Foster methodology — it counts overlapping hardships a person faces at the same time.
Statement 2 — Correct. India's National MPI (by NITI Aayog) has 12 indicators:
- It keeps the 10 standard global indicators
- Adds 2 new ones specific to India
Statement 3 — Incorrect. The trap here: Maternal Health and Bank Account are NOT common between both indices. They are only in India's National MPI — added as extra/exclusive indicators. The Global MPI (UNDP) has only 10, without these two.
Memory Trick: India's MPI = Global's 10 + India's special 2 (Maternal Health + Bank Account) = 12. These 2 extras are India-only, not shared with UNDP.
Consider the following statements about the Non-Banking Financial Companies (NBFCs) in India :
- NBFCs cannot accept demand deposits.
- All the NBFCs operating in India have to be registered with the RBI.
- NBFCs form part of the payment and settlement system and can issue cheque drawn on itself.
- Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation (DICGC) is not available to the depositors of deposit taking NBFCs.
Which of the statements given above is/are correct ?
Detailed Explanation:
Statement 1 — Correct. NBFCs cannot accept demand deposits (savings/current accounts). Some NBFCs CAN take fixed/term deposits, but only with special RBI permission.
Statement 2 — Incorrect. Not ALL NBFCs register with RBI. Some are regulated by other bodies:
- Venture Capital Funds, Merchant Banks → SEBI
- Insurance companies → IRDAI
- Nidhi companies → Ministry of Corporate Affairs
- Chit Funds → State Governments
Statement 3 — Incorrect. NBFCs are NOT part of the payment & settlement system. So they cannot issue cheques drawn on themselves.
Statement 4 — Correct. DICGC insurance (₹5 lakh cover) is only for bank depositors — NOT available to NBFC depositors.
Memory Trick: NBFC = "Bank-like, but NOT a bank" → no demand deposits, no own cheques, no DICGC, not all need RBI registration.
Short Notes on NBFCs
What is an NBFC? A company registered under the Companies Act, engaged in lending, investments, leasing, etc. — but NOT a bank.
Key Differences from Banks:
| Feature | Bank | NBFC |
|---|---|---|
| Demand deposits | ✅ Allowed | ❌ Not allowed |
| Issue own cheques | ✅ Yes | ❌ No |
| Part of payment system | ✅ Yes | ❌ No |
| DICGC insurance | ✅ Yes (₹5 lakh) | ❌ No |
| CRR/SLR maintenance | ✅ Mandatory | ❌ Not required |
| Regulator | RBI (always) | RBI usually, but some by SEBI/IRDAI/MCA/State Govt |
Who Regulates NBFCs (besides RBI)?
- SEBI → Venture Capital Funds, Merchant Banking companies
- IRDAI → Insurance companies
- Ministry of Corporate Affairs → Nidhi companies
- State Governments → Chit Fund companies
Types of NBFCs (common ones):
- AFC – Asset Finance Company
- IFC – Investment & Credit Company
- Microfinance NBFC
- Housing Finance Company
- Infrastructure Finance Company
- Core Investment Company
Why NBFCs Matter (Significance):
- Reach last-mile borrowers banks often skip (rural, MSME, informal sector)
- Provide credit faster, with simpler paperwork
- Important for financial inclusion
Common Risk Area in News:
- NBFC liquidity crises (e.g., IL&FS crisis)
- RBI's Scale-Based Regulation (SBR) framework for NBFCs (since 2021) — categorizes NBFCs into Base, Middle, Upper, and Top layers based on risk
With reference to different Committees in India, consider the following details :
| Sl. No. | Committee | Objective | Organization under which it was formed |
|---|---|---|---|
| 1. | R.N. Malhotra Committee | Comprehensive reforms of Insurance sector in India | Insurance Regulatory and Development Authority of India |
| 2. | L.C. Gupta Committee | Preparing a roadmap for the introduction of derivatives trading in India | Securities and Exchange Board of India |
| 3. | Urjit R. Patel Committee | Preparing a roadmap for reforming bank lending to the Housing sector | Reserve Bank of India |
| 4. | Y.H. Malegam Committee | Preparing a roadmap for reforms in Microfinance sector in India | Reserve Bank of India |
In which of the above rows are all the details correctly matched ?
Detailed Explanation:
Row 1 — Incorrect. R.N. Malhotra Committee (1993) was formed by Government of India, NOT IRDAI. In fact, IRDAI itself was created (1999) because of this committee's recommendations — so IRDAI couldn't have formed it before it existed!
Row 2 — Correct. L.C. Gupta Committee (1996), formed by SEBI, for roadmap on derivatives trading.
Row 3 — Incorrect. Urjit Patel Committee (2013), formed by RBI — but its real objective was Monetary Policy Framework reform (flexible inflation targeting, creation of MPC), NOT housing sector lending.
Row 4 — Correct. Y.H. Malegam Committee (2010), formed by RBI, for Microfinance sector reforms — made after the Andhra Pradesh microfinance crisis.
Memory Trick: "IRDAI was BORN FROM Malhotra, not the other way" — and "Urjit Patel = Monetary Policy, not Housing."
Important Committees
| Committee | Year | Formed By | Real Purpose |
|---|---|---|---|
| R.N. Malhotra | 1993 | Govt of India | Insurance sector reforms → led to IRDAI's creation |
| L.C. Gupta | 1996 | SEBI | Roadmap for derivatives trading |
| Urjit Patel | 2013 | RBI | Monetary Policy Framework reform; recommended MPC |
| Y.H. Malegam | 2010 | RBI | Microfinance sector regulation (post AP crisis) |
| Narasimham Committee I | 1991 | Govt of India | Banking sector reforms |
| Narasimham Committee II | 1998 | Govt of India | Banking sector reforms (phase 2) |
| Bimal Jalan Committee | — | RBI | Economic capital framework of RBI |
| Nachiket Mor Committee | 2013 | RBI | Comprehensive financial services for small businesses/low-income households |
Common Trap Pattern in UPSC:
- Mixing up who formed the committee (Govt vs Regulator)
- Mixing up the actual objective with a similar-sounding one (e.g., Housing vs Monetary Policy)
Which of the following statements about Crowdfunding is/are correct ?
- Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.
- Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.
Select the answer using the code given below :
Detailed Explanation:
Statement 1 — Correct. Crowdfunding (as defined by SEBI) = collecting small amounts of money from many people through a website/social media platform for a specific project. It skips traditional banks/investors and connects directly with the public.
Statement 2 — Correct. For SMEs and startups, crowdfunding offers:
- Cheaper funding (vs high-interest bank loans)
- No need for heavy paperwork, collateral, or compliance (unlike banks or stock exchange listing)
- They don't have to give up large equity stakes to big investors either
Both statements describe the same basic concept from different angles — no contradiction.
Memory Trick: Crowdfunding = "Many small hands building one big project" — cheap, easy, online.
Crowdfunding
Definition (SEBI): Solicitation of small funds from multiple investors via web/social platforms for a specific project, venture, or cause.
Types of Crowdfunding:
| Type | What it means |
|---|---|
| Donation-based | No return expected (e.g., disaster relief) |
| Reward-based | Backers get a product/perk in return |
| Equity-based | Investors get company shares |
| Debt-based (P2P lending) | Investors get repayment with interest |
Benefits:
- Low cost of capital for SMEs/startups
- No heavy compliance/collateral burden
- Wider investor base, faster access to funds
- Democratizes finance — bypasses traditional banks
Risks/Concerns:
- Lack of regulation in some platforms
- Risk of fraud
- SEBI has been cautious about equity crowdfunding in India — currently restricted/under regulatory scrutiny due to investor protection concerns
Related Terms:
- P2P Lending — regulated by RBI as NBFC-P2P
- Angel Investment — different from crowdfunding (few large investors, not many small ones)
UPSC Prelims 2026 Questions Paper - Subject-wise Question Distribution
Science & Technology
19 Qs (19%)Indian Economy
18 Qs (18%)International Relations
11 Qs (11%)Ancient History
9 Qs (9%)Indian Polity
8 Qs (8%)Environment & Ecology
8 Qs (8%)Indian Art & Culture
7 Qs (7%)Indian Geography
5 Qs (5%)Modern History
5 Qs (5%)World Geography
4 Qs (4%)Ethics, Integrity & Aptitude
3 Qs (3%)Current Affairs
2 Qs (2%)Internal Security
1 Qs (1%)UPSC Prelims 2026 Question Paper - FAQs & Analysis
Q1 How many total questions were asked in UPSC Prelims 2026?
Q2 What is the subject-wise question breakdown for UPSC Prelims 2026?
- Science & Technology: 19 questions (19%)
- Indian Economy: 18 questions (18%)
- International Relations: 11 questions (11%)
- Ancient History: 9 questions (9%)
- Indian Polity: 8 questions (8%)
- Environment & Ecology: 8 questions (8%)
- Indian Art & Culture: 7 questions (7%)
- Indian Geography: 5 questions (5%)
- Modern History: 5 questions (5%)
- World Geography: 4 questions (4%)
- Ethics, Integrity & Aptitude: 3 questions (3%)
- Current Affairs: 2 questions (2%)
- Internal Security: 1 questions (1%)